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Note 15 - Stock-based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Text Block]

Note 15 – Stock–Based Compensation

NHC recognizes stock–based compensation expense for all stock options granted over the requisite service period using the fair value at the date of grant using the Black–Scholes pricing model. Stock–based compensation totaled $726,000 and $518,000 for the three months ended September 30, 2021 and 2020, respectively. Stock–based compensation totaled $1,905,000 and $1,807,000 for the nine months ended September 30, 2021 and 2020, respectively. Stock–based compensation is included in “Salaries, wages and benefits” in the interim condensed consolidated statements of operations.

At September 30, 2021, the Company had $1,767,000 of unrecognized compensation cost related to unvested stock–based compensation awards. This unrecognized compensation cost will be amortized over an approximate one-year period.

Stock Options

The following table summarizes the significant assumptions used to value the options granted for the nine months ended September 30, 2021 and for the year ended December 31, 2020.

	September 30, 2021			December 31, 2020
Risk–free interest rate		0.21	%		0.87	%
Expected volatility		35.1	%		20.1	%
Expected life, in years		2.2			2.2
Expected dividend yield		3.01	%		2.91	%

The following table summarizes our outstanding stock options for the nine months ended September 30, 2021 and for the year ended December 31, 2020.

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value
Options outstanding at January 1, 2020		809,529		$	71.24	$	–
Options granted		104,057			73.98		–
Options exercised		(43,630	)		63.37		–
Options cancelled		(3,000	)		72.94		–
Options outstanding at December 31, 2020		866,956			72.11		–
Options granted		56,795			70.73		–
Options exercised		(148,900	)		68.41		–
Options cancelled		(6,000	)		72.94		–
Options outstanding at September 30, 2021		768,851		$	72.72	$	656,425

Options exercisable at September 30, 2021		177,686		$	69.38	$	587,578

Options Outstanding September 30, 2021	Exercise Prices			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years
103,775	60.73	-	67.28		63.65		2.3
665,076	71.64	-	84.30		74.14		0.9
768,851					72.72		1.0